US government offers debt relief to 'defrauded' grads of 91 college campuses

Mallory Heiney, pictured here, attended a Corinthian college and refused to pay back her debt.screenshot
The US Department of Education said Friday it will pave the way for debt forgiveness for former students at 91 different campuses of bankrupt for-profit-college chain Corinthian Colleges Inc.

Corinthian Colleges filed for bankruptcy in May 2015 amid lawsuits brought by several state attorneys general and the Consumer Financial Protection Bureau alleging the company lied about its job-placement rates.

"When Americans invest their time, money and effort to gain new skills, they have a right to expect they'll get an education that leads to a better life for them and their families. Corinthian was more worried about profits than about students' lives," Education Secretary John B. King Jr. said in a statement on Friday.

"Through these important partnerships with states' attorneys general," he added, "we are pleased to offer relief to Corinthian students who were defrauded."

The announcement comes two days after a San Francisco Superior Court judge ordered Corinthian Colleges to pay the state of California a $1.17 billion default judgment, reports The Associated Press.

"CCI (Corinthian Colleges Inc.) advertised job placement rates as high as 100% for specific programs when, in some cases, there is no evidence that a single student obtained a job during the specified time frame," Kamala D. Harris, the attorney general for California, said in a 2013 press release announcing her state's lawsuit.

The Department of Education's "special master," Joseph A. Smith, said in a new report Friday that the department had already forgiven $130 million in loans for 8,800 people.

Mallory Heiney, a former student of Corinthian's Everest College, called the school a "debt trap" and said her teachers did little more than read aloud from textbooks while in class, in an op-ed for The Washington Post last year. She was a member of the so-called Corinthian 15, a group of graduates refusing to pay back their student loans.

"In 1955, Rosa Parks refused to give up her seat on a bus," Heiney wrote in her article. "This soon led to the revolutionary Montgomery bus boycott. If those who came before us can take a stand in the face of persecution, harassment, beatings, imprisonment and even death, I will certainly stand in the face of wage garnishment and a tarnished credit report."